AGNEW MINE

In the quarter ended Jun30/09, gold production at Agnew decreased 9 per cent from 49,500 ounces in the March quarter to 45,200 ounces in the June quarter, as expected. The decreased production reflects the scheduled twelve day maintenance shut down at the plant, enabling a number of projects to be completed. This included re-machining the teeth of the girth gear on ball mill two and sending the trunion housing from ball mill one for refurbishment. During this time further works were done on the cyanide code compliance, including a new concrete trash screen bunker and pipe racks. As a result of this maintenance programme, tons processed decreased from 277,000 tons in the March quarter to 228,000 tons in the June quarter, partially offset by an increase in yield from 5.6 grams per ton in the March quarter to 6.2 grams per ton in the June quarter because of an increase in higher grade Kim Lode ore processed. Ore mined from underground increased by 4 per cent from 193,000 tons in the March quarter at a head grade of 7.7 grams per ton to 201,000 tons in the June quarter at a head grade of 7.8 grams per ton. The increase was due to improved equipment availability and increased production from Main Lode. Decline and capital development increased from 673 metres in the March quarter to 962 metres in the June quarter. A decline to link Main Lode to Kim Lode commenced in the March quarter and is expected to be finished at the end of the September quarter.

Gold production increased 10 per cent from 45,000 ounces in the December quarter to 49,500 ounces in the March quarter. Ore mined from underground increased by 14 per cent from 169,000 tons in the December quarter at a head grade of 8.3 grams per ton to 193,000 tons in the March quarter at a head grade of 7.7 grams per ton. The increase was due to improved equipment availability and increased production from Main Lode. Decline and capital development increased from 471 metres in the December quarter to 673 metres in the March quarter. A decline was commenced to link Main Lode to Kim Lode at a depth of 600 metres below surface to improve haulage, logistics and ventilation.

Gold production was in line with guidance, but decreased by 14 per cent from 52,200 ounces in the September quarter to 45,000 ounces in the December quarter. The reduction in tons processed from 308,000 in the September quarter to 253,000 in the December quarter is due to depletion of low grade stockpiles, specifically the end of the Songvang material. The mine undertook a toll treatment campaign of 67,000 tons in the quarter which offset the completion of the low grade stockpiles somewhat. There are sufficient other low grade stockpiles to maintain a steady mill feed of 90,000 tons per month for the life of the current reserve. Ore mined from underground remained relatively stable with only a slight reduction from 173,000 tons in the September quarter to 169,000 tons in the December quarter. Kim Lode production increased 30 per cent from 98,000 tons in the September quarter at a grade of 11.3 grams per ton to 127,000 tons in the December quarter at a grade of 9.5 grams per ton. The decrease in grade is a function of the mining sequence as the grade varies along strike. Main Lode production decreased 45 per cent from 70,000 tons in the September quarter at a grade of 4.0 grams per ton to 38,000 tons at a grade of 4.8 grams per ton. The decrease was due to the reduced equipment availability.